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You now need to calculate the cost of debt and the weighted average cost of capital (WACC) for Seek Ltd. (7 marks) What is the
You now need to calculate the cost of debt and the weighted average cost of capital (WACC) for Seek Ltd. (7 marks)
What is the cost of debt for Seek Ltd? (4 marks)
o You can calculate cost of debt as interest expense divided by book value of debt
o Is the figure you get reasonable? For example, is it close to the firms borrowing rate (weighted
average interest rate)?
o Briefly discuss possible reasons for any differences in the cost of debt you calculated and the
companys borrowing rate.
What is the WACC for Seek Ltd? (3 marks)
o Calculate WACC using book value of equity and also using market value of equity. o WhichofthetwoWACCswouldyouuseandwhy?
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States And The Reemergence Of Global Finance
Authors: Eric Helleiner
1st Edition
0801428599, 978-0801428593
